Rana Dasgupta - Capital - The Eruption of Delhi

“That is the society we live in. Our policemen are not supposed to do anything for society. All they’re supposed to do is protect rapacious elites from it. But the people who are protecting them have total contempt for them. One day, if things continue like this, they will shoot them dead.”

Everyone wants their house to be done up in the style of a Russian oligarch.

— Interior designer to the Delhi rich

Rajiv Gandhi’s assassination in 1991, purportedly at the hands of the Liberation Tigers of Tamil Eelam, against whose Sri Lankan terrorist campaign he had made public statements, took place in the midst of the largest financial scandal the country had ever seen. The ‘Bofors’ scandal arose from rumours that the Swedish company had contrived to secure a multibillion-dollar arms contract by paying large kickbacks to several members of the Congress Party, including prime minister Rajiv Gandhi himself. The scandal reached to the heart of the Indian polity not only because of the unprecedented size of the bribes involved — which have been estimated at around $40 million 46— but also the fact that they reached to the summit of government and, indeed, to the Nehru dynasty.

The exact truth of these allegations has never been reliably confirmed. But it seems quaint, in retrospect, to see the shock they provoked. And this is because the liberalisation of the economy, which took place a few months after Rajiv Gandhi’s death, greatly expanded both the scale and the frequency of ‘big ticket’ deal-making of this sort. It introduced, indeed, an entirely new system of financial flows which concentrated enormous money in the hands of a small nexus of dealmakers from the worlds of politics and business. It generated a new Indian oligarchy.

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Insofar as public administration was a money-making venture, liberalisation represented, in the short-term, a disaster. The end of the license regime meant that public officials no longer enjoyed their traditional hold over business. Businessmen did not have to approach them for licenses every time they wanted to expand a factory or launch a new product, which meant that, for politicians and bureaucrats, large revenue streams disappeared.

But administration was a business, and like other businesses it found ways to innovate in the face of adversity. Politicians and bureaucrats sought out new revenue streams. They began to collect not small sums from large numbers of petitioners but large sums from a few. And they did not make money any more by charging for the removal of obstacles. Instead they ‘earned’ their money by becoming partners to business and taking over an entire branch of business operations — that branch which required the powers of the state.

This came at a time when big business, for its part, was greatly in need of this manner of partnership. The years after liberalisation saw a large-scale transfer of ownership of basic resources — the so-called ‘commanding heights’ of the economy, which Nehru had reserved for the state — to private hands. These included mines, oil and gas, and that fuel of the new economy, the mobile telephony spectrum — and, of course, land, the basic resource par excellence. Whoever could secure control of these resources would inevitably make fantastic gains. But there was no precedent for the process of transfer: it was — in India as in the former Soviet Bloc in the same years — a makeshift scramble, and its outcome lay, ultimately, in the hands of the political establishment. The businessmen who came out on top, therefore, were the ones with strong political connections — often those who had already been cultivating those connections since Mrs Gandhi’s time. Since the stakes could not have been higher — for whosoever could control the new Indian economy would be propelled to global levels of influence — politicians could also charge handsomely for their preferment. There was suddenly a level of deal-making that made Bofors seem infantile. The early twenty-first-century scandals surrounding corporations’ under-payment for the mobile telephony spectrum and for mines mentioned sums in the tens and even hundreds of billions of dollars. India’s pool of billionaires expanded rapidly, increasing their wealth from less than 1 per cent of national income in 1996 to 22 per cent in 2008. Sixty per cent of this billionaire wealth was built up from sectors closely controlled by government: property development, infrastructure, construction, mining, telecoms, cement and media. 47

It was no wonder that most people in Delhi, where the largest of these deals were done, believed that the very richest people in the city were not those whose wealth was published in corporate accounts, but the ones who travelled around in ancient white Ambassadors and earned a salary of $1,000 per month. Politicians refrained from acquiring valuable assets in their own names, but somehow their brothers and sons seemed suddenly to own fabulous land and property, and to have investments in a fantastic range of ventures. Was it not suspicious how many political families bid for cricket teams in the Indian Premier League auction? Was it not a sign of how valuable political offices were to their incumbents that campaign spending doubled with each general election 48— which in turn put even more pressure on politicians to turn their situation to profit? There were extraordinary rumours about politicians’ personal worth. The media tried to guess what level of riches were involved by tracking consumer indulgences — houses, cars, children at expensive American schools — and there was in those years widespread resentment about the seemingly charmed lifestyle of so-called public servants. But in many ways, this interest in personal property and lifestyle was to miss the point. Because the people playing at the top of this game had long since passed the level where personal enrichment was the objective. They were involved in something far more grandiose than this, and something that enriched their entrepreneur partners more than themselves. That was not the point, however: these people were the power brokers of the new India, and what they were running was a system for privatised commercial development that was its own reward — a system with an entirely different structure to the ‘normal’ economy in which middle-class people earned money and bought things to improve their lives.

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Mayawati, the politician from Uttar Pradesh who presented herself as the champion of dalits like herself, and of the oppressed in general, and who rose to become four-times chief minister of the state, was certainly one of the most ruthlessly extractive of all Indian politicians, and she accumulated an immense private fortune (it was she who purchased the Delhi mansion that had hosted the childhood of Sadia Dehlvi, whom we met earlier). But the paradoxes of Mayawati’s career were not merely of the crude — millionaire-politician-says-she-is-friend-of-the-poor — kind. In Indian politics, money-making was no longer proof of insincerity, especially since a woman like Mayawati, who came from the oppressed classes, who presided over a criminalised state and who had many enemies, could not possibly sustain her position without enormous funds for patronage and re-election. And Mayawati did display a bizarre, carnivalesque commitment to her state’s oppressed classes, not only giving them hand-outs and goodies, but also dignifying their status with a campaign of symbolic building and public sculpture that placed her in a rare category of Indian politician: perhaps none other since Nehru had demonstrated such interest in the political mission of architecture. At the gateway from Delhi, where the road crosses the border into Noida, the large suburb on the Uttar Pradesh side, she laid out a bewilderingly elaborate park where twenty-four enormous sandstone elephants — symbols of her party — attended statues of fifteen dalit icons, including Mayawati herself. Like many female politicians, in fact, she designed for herself a goddess-cult in which her low caste and her great wealth became positive images of a new order: her birthdays became major ceremonial events at which she displayed herself to her followers draped in thousands of banknotes.